Pakistan’s Fiscal Deficit Drops to 2.4% in 9MFY25

Islamabad – Pakistan recorded a fiscal deficit of 2.4% of GDP in the first nine months of fiscal year 2025 (9MFY25), compared to 3.7% during the same period last year, according to official data released on May 7.

The improvement is due to a 26% rise in tax revenue and a 68% increase in non-tax revenue, largely led by the State Bank’s record profit of Rs 2.5 trillion.

In Q3FY25, the deficit was 1.2% of GDP, down from 2.8% in the previous quarter. The primary surplus for 9MFY25 stood at 2.8%, up from 1.5% a year ago.

Despite gains, tax collections missed IMF targets, partly due to low inflation. Interest payments remained steady at Rs 1.3 trillion for Q3FY25.

The FBR tax and PDL-to-GDP ratio increased to 2.5%, and defense spending rose 11% to Rs 534 billion.

Analysts project a full-year deficit of 5.5% of GDP, with a 2.0% primary surplus, based on a revised GDP of Rs 115 trillion.